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Enforcing The Surety’s Rights To The Defaulting Principal’s Contract Funds On Federal Projects: A Step-By-Step Guide to Navigating the FAR

The Miller Act, 40 U.S.C. §§ 3131- 3134, requires a contractor (“Principal”) on a federal project to post two bonds: a performance bond and a labor and material payment bond to guarantee completion of the construction according to the plans and specifications in the contract and payment of laborers, subcontractors, and material suppliers. The Miller...

WASHINGTON SUPREME COURT FINDS THAT EXCLUSIVE MEANS OF SERVICE FOR AUTHORIZED FOREIGN INSURER IS THROUGH WASHINGTON STATE INSURANCE COMMISSIONER

Quarterly Newsletter Spring 2018 Similar to the vast majority of other states, service of legal process is governed by statute in Washington. RCW 48.05.200(1) states that an “authorized foreign or alien insurer must appoint the commissioner as its attorney to receive service of, and upon whom must be served, all legal process issued against it...

OREGON FEDERAL COURT FINDS NO BREACH OF DUTY OF GOOD FAITH DESPITE INSURER’S BREACH OF CONTRACT

Quarterly Newsletter Spring 2018 In a recent decision, an Oregon Court rejected an insurer’s position that the terms “surface water” and “flood water” referred to natural water sources as well as man-made sources, thereby finding that the insurers breached the contract by denying coverage. However, the Court reinforced the general rule in Oregon that, despite...

WASHINGTON/OREGON DOCTRINE OF EQUITABLE SUBROGATION: ARE INDEMNITY AGREEMENTS NECESSARY?

Surety Law Update Spring 2018 In recent years, some sureties have waived the need for a signed indemnity agreement usually for smaller, commercial bond accounts. This decision usually is based on underwriting and business considerations designed to make the bonding process easier for the producing agent. This article briefly discusses considerations of this industry movement...

WASHINGTON COURT OF APPEALS DISMISSES OREGON CONTRACTOR’S LAWSUIT FOR FAILURE TO SUBSTANTIALLY COMPLY WITH CONTRACTOR REGISTRATION REQUIREMENTS

Surety Law Update Spring 2018 In a recent unpublished opinion, in HNS, Inc., v. Eagle Rock Quarry, No. 34695-1-III, 2018 WL 1617071, (Wash. Ct. App. Apr. 3, 2018), Division Three of the Washington Court of Appeals dismissed an Oregon contractor’s lawsuit against a Washington contractor, and its license bond, because the Oregon contractor failed to...